Household debt in 2014 increased at fastest rate for a decade

Households in the UK took on an average of £395 of additional consumer debt in 2014, new analysis by The Money Charity shows – the biggest growth in any year since 2004.

Average consumer credit debt stood at £6,322 in December, up from £5,938 at the end of 2013. In 2013, the average increase was just £50 – but as the recovery continues, consumers are rediscovering their appetite for credit cards, overdrafts, and personal loans.

Total lending, including mortgages, grew by £1,081 in the year, the most since 2008. At the height of the property boom this was growing by over £4,000 per household per year.

In total, people in the UK owed £1.466 trillion at the end of December, of which nearly nine tenths was mortgage debt.

Michelle Highman, Chief Executive of The Money Charity, said: “As we get stuck in to a new year, the news that the average household increased its consumer credit debt by nearly £400 last year will prompt many to think about their finances.

“There’s no better time to start taking control of your money and making a plan – and the best way to start is to make a budget with a tool like our free Budget Builder. If you can do that, you can start making your money work for you and achieve your goals!

“But if things are already too much, pick up the phone to StepChange or one of the other free debt advice charities who will be able to help you properly assess your options.”